Comment by rgr

I agree with Paul's point, but it seems like the flip side of the equation is that most startups these days don't have the kind of big exits that internet giants like Amazon, Ebay, Yahoo and Google had (or even the mass market penetration that MySpace and Facebook have gotten for that matter). If a these new startups truly had the potential to capture huge markets, they would need the funding, because 3 guys in an apartment simply can't go after a $5bil opportunity. I think the phenomenon Paul describes is the result of 2 trends, not just one: 1) it's cheaper to start companies and 2) most startups are going after small markets (or whatever is left from big markets that bigger companies have already captured).